from the quid-without-a-quo dept

Since the release of the TPP text back in November, commentators have naturally tended to concentrate on the bigger, more obvious problems -- things like the corporate sovereignty chapter, the extension of Big Pharma's monopolies to scientific data, and copyright provisions -- that Techdirt has been exploring for years. But there's one area that has received relatively little attention, perhaps because for most people it's an obscure topic that seems rather unimportant. It concerns the issue of trade secrets, which Techdirt wrote about in the context of TPP in October 2014. There, we concentrated on the risk that it would chill investigative reporting and corporate whistleblowing, but a new column in The Globe and Mail by Dan Breznitz, professor of Innovation Studies at the Munk School of Global Affairs at the University of Toronto, looks at the economic impact of TPP's trade secrets measures. First, he notes that copyright and patents are based on a social bargain:

The side that wishes to be granted a patent needs to disclose new and useful information to society at large, and in return we (the people) give it an exclusive right for a limited time, preventing others from using it without permission. In other words, we grant it a temporary monopoly.

But trade secrets are quite different:

[W]e (the people) give rights to prevent others from using any information without any disclosure and without any time limitation or otherwise -- as long as it remains undisclosed (in other words, secret). In so doing, we give a quid that covers potentially wide-ranging types of information, without receiving any quo in return.

Since society gets almost nothing out of this other bargain, the remedy available for the disclosure of secret business information is limited:

Currently, the remedy is available only against those who breached the contract or trust, but not against others who obtained the information. Once the information has been disclosed publicly, the person who disclosed it might be held liable, but everyone else is free to use it.

As Breznitz points out, TPP changes all that, offering a much wider scope for protection, and much more serious penalties for breaches of trade secrets:

Article 18.78 [of the TPP text] adopts a potentially very broad concept of a trade secret, a very wide range of activities that might constitute a breach and a very broad potential class of persons who might be liable. Worse, it also calls for criminalization. The potential risk for would-be entrepreneurs to start a business in anything that even remotely relates to their past job are now enormous.

In other words, like much everything else in TPP, the proposed changes work to the advantage of big, established companies -- and against the interests of start-ups and entrepreneurs:

The resulting chill [caused by TPP's trade secrets rules] in entrepreneurship alone would cost the U.S. and Canadian economies significantly higher orders of magnitude in terms of lost growth, jobs and welfare than any positive benefits that the TPP might bring. Even more disturbing, Articles 18.74 and 18.75 profoundly expand the enforcement measures, including significant provisional ex parte proceedings [with only one side present], and narrow the discretion of the courts. Those provisions apply to all intellectual property rights, including trade secrets. These extra-potent tools would be used not only where they are appropriate, but also where they aren’t -- such as to stifle competition and innovation.

That's a bold claim, but, if true, suggests that TPP could be an extremely bad deal for the US. At the very least, it deserves some serious research to investigate the issue. However, given the absurdly-truncated time span available for studying the TPP text, that research is unlikely to be conducted, which means that the US could end up entering blindly into an agreement whose net economic and social effects will be decidedly negative.

Reader Comments

No worries

I'm sure the corporations that added that clause have gone over it plenty to make sure it's as good as they can get it, so it has been reviewed and determined to be acceptable by all the parties that count.

Re: No worries

except that it doesn't and is not acceptable by all parties that count, namely small business owners and other small entrepreneurs that don't have the big lobbying dollars that the big mega-corps and other wealthy entrepreneurs have. have you ever heard the term the squeaky wheel gets the grease? well in this case that grease is money and the squeaky wheel are those are and have been negotiating this TPP in secret.

Re: Re: No worries

It would be a bad deal for the US - if those who put the idea forward in the first place gave a fuck. As far as they're concerned, they are the US. To them and the fanboys that regularly troll the threads like antidirt and Whatever, everyone outside major corporations can go die in a fire.

The scary part is that these regulations make IP in any form obsolete - simply suing competitors based on ALLEGED infringement will drain all the cash from anybody but the largest multinationals. Just the threat of legal action will be enough to extort protection money or lopsided agreements.

this..makes me feel absolutely terrible. 2015 was a mess and it sounds like it'll be much worse in 2016 and further. Knowing that so much will shift in favor of the already massively powerful corporations over the people just makes me feel like ending it all.

If this happens my family is certain to suffer more, my parents and grandmother will have a much harder time affording their generic medicines. This is wrong but these sick monsters just don't care, they want us to die.

Why won't the people wake up and pay attention to one of the worst things to ever happen to them? What are we supposed to do? How can this be beaten by the average people when the a-holes meant to represent us are in the pockets of big money?

Re: Three Conundrums

Moot questions. Secrets are all now profit potential. I have a cookie recipe that uses FLOUR. Oops, the secret leaked; so now all you peasants in the cookie making and eating world can choose to either prove in court you're not liable for damages, or you can settle out of court for the very reasonable sum I'll cut from your hindquarters. Simple how it all works.

What's a Secret?

What's a trade secret? Anything that's not published for the world to see? My secret sauce recipe? My customer list? My sales numbers? The hidden API for my operating system or application that gives me an edge in writing extension apps? My five year plan? My presentation to shareholders, before I present it? Projected capital spending plan? Location of the new plant before it's announced?

Shall I keep going? Anything not published is secret. Anything corporate, secret, and not yet revealed is obviously a trade secret. leak it and go directly to jail... exploit it and you get to pick up soap in the shower...

TPP

You refer to Prof. Breznitz’s Op-Ed, Trans-Pacific Partnership is a wonderful idea – for China, where he claims the trade secret provisions in the TPP will “seriously restrict entrepreneurship, diminish competition and limit the basic economic freedom of individuals”. None of his claims can be supported.

He claims that the TPP’s civil law protection “adds several badly written, ambiguous trade-secret propositions to the law”. Yet, the obligations are substantially identical to the international standard for protecting trade secrets in the WTO TRIPs Agreement which 162 countries and territories (including the US, Canada and China) agreed to, as well in NAFTA. U.S and Canadian law already fully meets this TPP requirement.

Prof. Breznitz’s also claims that the TPP’s criminal sanctions for trade secret violations pose great risks. It is even harder to understand why he has any concerns here.

As I've mentioned on here before, trade secrets are the problem that patents were created to solve, because if you keep something useful secret too well, the secret may well die with you, and there are innumerable examples of that happening throughout history, losing great treasures of "science and the useful arts." So the solution was to provide secret-like protection in return for requiring the secret to be published so it couldn't be lost.

Unfortunately, lawmakers don't understand this, and they continue to treat trade secrets as something legitimate. This is exactly the wrong thing to do; instead of strengthening trade secret protections, we should repeal them entirely. The only examples I've ever seen of people offering what appears to be a legitimate example of trade secrets worthy of protection is stuff like client lists, which is better classified under "protection of privacy" anyway, so there really is no good reason for trade secrets to be a thing considered worthy of legal protection anymore.

Has Trudeau Read & Understood the TPP, et al? When will he be prepared to answer the Questions re; TPP & its relationship to The WAD Accord's Compensation & the Corporations of the TPP's Contribution to it?

Much More Taxpayer (non-Corporate America/Canada) paid for Litigation on the Way as Native Canadians, et al, look to Courts for Certainty (see; ‘Nexen’) re; Global Corporate ’Arrangements’ (treaties). Liberals (Canada) swear that they may not have had part of the Planning & Cover-up of The Residential Schools’ Native Canadian Cultural Genocide & Ordained Pedophile Rings?

Why are Corporate Canada’s Liberals 'forgetting' to tell its Global Corporate associates; promoters of TPP, CETA, C-CIT, et al, that they cannot & will not be able to supersede Native Human rights, consultations, et al? Proof of Good intentions in Prior, During & Follow-up Discussions Needed for ‘Foreign’ Treaties/’Arrangements’ with Vast Modifications prior to Implementation, or, Rejection. Anything besides Schedule of Tariff Reductions needs Native Approval.But, which international stockbrokers have not protected their clients from ‘The Submission’ to The Supreme Court of Canada? Another ‘unregulated’, designed, Wall St. ‘meltdown’, but, global via Treaties/’Arrangements’? And, who will protect the ‘harmless’ taxpayers? *** PRESIDENT OBAMA, PRIME MINISTER TRUDEAU (CAN.), the leaders of the other political parties operating in Canada, the executives of the parties, Leaders & citizens of the EU, China, the Trans-Pacific nations, et al; After serving you with; "NOTIFICATION of Pre-existing CHALLENGE(s) to the C-CITreaty (FIPPA), the CETAgrement, the TPPartnership, et al" on, or, about, 2015,do you think that it would prudent for both; Canadians & non-Canadian who are the potential shareholders & non-shareholders of the businesses, industries & enterprises that will be generated by, or, effected by, the aforementioned agreements, treaties, &/or, partnerships, to wait for the findings regarding:

And, what, if anything, have you & the other leaders done that will ensure that those voters that have not been privy to the aforementioned agreements, treaties, &/or, partnerships, have the same, or, more time (ie. 10 years for non-lawyers) to read, consider, discuss, improve upon, &/or, reject, or, accept (with funding by corporate Canada to pay the requisite contingent of lawyers to work out; a) the dollar impact for the harmless taxpayers & the designers of the ‘original’ draft; corporate Canada and b) alternatives.

Furthermore, what is the schedule of punitive penalties that the voters will receive from Corporate Canada & the federal government if/when the TPP, et al, Tribunals try to take trade penalties from the top of the taxpayers budgets in order that the Tribunals’ penalties don’t interfere with expanding our spending for health care, education, CPP & other services. That is to say; the TPP penalties need to be at the bottom of the ‘balanced’ federal, et al, budgets; after all other payments, compensations & suits by the provinces/municipalities against corporate Canada & the federal government as per ‘The Submission’ to The Supreme Court of Canada (see; davidehsmith.wordpress.com) & ‘The MERKEL (Chancellor of Germany) Letter’ (see; davidehsmith.wordpress.com)?

And, ‘finally’, Canadian provinces, such as, Alberta, that allow Canadian corporations to pollute, frack for LNG, etc., do not set precedents for all of Canada, it merely allows foreign/global signatories to do pollute, frack for LNG, etc. in the jurisdiction of Alberta, but, these foreign corporations must maintain rigorous environmental standards that will not challenge the neighboring provinces, &/or, the other effected jurisdictions. Under these & other circumstances the corporations are deemed liable & fit to be sued by all of the effected jurisdictions of Canada.

Please also remember Mr. Trudeau, et al, that if all of the harmless voters/taxpayers demand shares in the aforementioned businesses, industries& enterprises as a consequence of the encumbrances of their rights,& /or, the future marginalizing of their rights, the entire TPP & the other Global Corporate Treaties/'Arrangements' come tumbling down as the cross-suing global corporations will be placed in the situation that we've discussed before whereby, the corporations will be in fact suing themselves without being able to totally pass along their liabilities, such as the secret Tribunals' punitive penalties, to the harmless, voters/taxpayers.

And, as the need to compensate Canadian; dairy farmers, auto manufacturers, fishermen, et al, has been created by corporation Canada in order for it & its shareholders to benefit directly from their secret 'arrangements', do you understand the need for the compensations to be taken from the gross earnings (trillions of dollars over the life time of the secretly growing scope of the TPP, et al) of the businesses, industries & enterprises that will be generated by, or, positively affected by, the aforementioned agreements, treaties, &/or, partnerships, and thus, the compensations will absolutely not be paid for in any part by the harmless voters/taxpayers, &/or, any of the potentially 'indirect' beneficiaries?

As always, I look forward to reading about your thoughts, your questions, your feelings, your improvements, etc., & those of your fellow party leaders, the executives of the parties, et al, regarding the enclosed.

If you should have any questions, or, problems with this issue, &/or, any other, I can be contacted at the numbers & addresses that I’ve previously provided you with.

David E.H. Smith- Researcher- 'Qui tam...'

OR,your signature

***For the FULL Letter with various sub-titles, see; davidehsmith.wordpress.com ***FULL ‘Submission’, see; The Supreme Court of Canada’,Or, Contact DEHSmith at davidehsmith.wordpress.com ***For FULL Article; 'Well, You should have known', see; davidehsmith.wordpress.com ***For more Information & Questions re; The Relationship between Human (Nature) Rights & Economics by way of the TTIP, the CET Agreement, TPP, C-CI Treaty, et al, and The WAD Accord & List of RECENT ARTICLES, LETTERS & NOTIFICATIONS by DEHS, see; davidehsmith.wordpress.com ***Please consider sharing the enclosed information& questions with 10 friends… who will share it with 10 others...